Green Tech Portfolio: Defensive Strength through “Essential Infrastructure”

1. A Strong Defensive Core in “Essential Infrastructure”

More than one-third of the portfolio now consists of utilities, water, and waste management companies — sectors characterized by high visibility and stable cash flows.

• Regulated utilities such as Exelon, Hydro One, Iberdrola, Middlesex, and Pennon Group benefit from regulated returns on their networks (Regulated Asset Base model), making revenue largely independent from economic fluctuations.

• Waste management companies maintain long-term contracts with municipalities and businesses, providing a robust revenue base even during recessions.

• Core & Main secures steady demand through replacement needs and municipal programs, less dependent on new construction cycles.

This segment creates a defensive backbone and enhances the portfolio’s resilience against short-term volatility.

2. Structural Winners in Electrification & Efficiency

The second pillar focuses on companies benefiting from secular megatrends:

• Eaton, ABB, Trane Technologies, Daifuku are key players in electrification, data centers, automation, and building efficiency. Service and aftermarket revenues plus large project backlogs add to predictability.

• First Solar adds a growth profile with relatively higher cyclicality, supported by long-term supply contracts and U.S. production incentives.

Growth trends are leveraged without sacrificing portfolio stability.

3. Subscription-Based Software for Stability

Software companies serve as additional stabilizers:

• SAP and Autodesk generate a large share of their revenues through recurring subscriptions with high customer retention. As their solutions are business-critical, churn is low even during downturns.

These holdings improve the overall earnings quality and predictability of the portfolio.

Another key to stability is the substantially reduced investment level:

• Instead of being nearly fully invested, the portfolio currently holds only 56% invested.

• This allows the portfolio to better cushion short-term market corrections.

• At the same time, it maintains the flexibility to deploy capital quickly when new uptrends emerge.

• High-quality cash flows from regulated or contractually recurring revenues

• Lower cyclicality through a defensive core in essential infrastructure

• Secular tailwinds instead of short-term economic bets

• Diversified sources of demand from households and municipalities to industry and software

• Disciplined risk management via a momentum system and controlled investment levels

Conclusion for Investors

The Green Tech Portfolio is currently defensively positioned in two ways:

• A high share of “Essential Infrastructure” ensures stable, predictable cash flows

• A significantly reduced invested capital ratio enhances defensive qualities

This setup makes the portfolio resilient in potentially more volatile markets — while keeping enough room to participate early in the next upward phase.